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Violation Tracker Individual Record

Company: Commonwealth Equity Services, LLC d/b/a Commonwealth Financial Network
Penalty: $93,274,068
Year: 2024
Date: April 4, 2024
Offense Group: financial offenses
Primary Offense: investor protection violation
Violation Description: The United States District Court for the District of Massachusetts entered a final judgment against Commonwealth Equity Services, LLC d/b/a Commonwealth Financial Network, a registered investment adviser and broker-dealer based in Waltham, Massachusetts. The SEC's complaint, filed on August 1, 2019, alleged that Commonwealth failed to disclose material conflicts of interest related to revenue sharing payments it received for certain client investments. According to the complaint, Commonwealth entered into a revenue sharing agreement with the broker that Commonwealth required most of its clients to use and received revenue sharing payments from that broker when it invested client assets in certain classes of mutual funds. The Court entered a final judgment ordering Commonwealth to pay $65,588,906 in disgorgement, representing the difference between the revenue sharing payments that Commonwealth received from investing clients' assets in higher-cost mutual fund share classes, and what Commonwealth's revenue sharing would have been if the clients' assets had been invested in lower-cost share classes of those funds, which paid less or no revenue sharing to Commonwealth. The Court also ordered Commonwealth to pay $21,185,162 in prejudgment interest and a civil penalty of $6,500,000.
Level of Government: federal
Action Type: agency action
Agency: Securities and Exchange Commission
Civil or Criminal Case: civil
Source of Data: (click here)
Archived Source: (click here)
Current parent company note: Parent-subsidiary relationship is current as of the most recent revision listed in the Update Log.